A1 + F2: The CMR Convention and transportation of cargo by road
The CMR Convention and transportation of cargo by road
This article deals with what responsibilities carriers and their employees have in connection with the execution of international carriage of goods for third parties.
Where does the law apply?
The Convention on the Contract for the International Carriage of Goods by Road (the CMR Convention) applies to the carriage of goods undertaken for a third party between states, when at least one of the states has ratified the CMR convention. You can find a list of the CMR countries on the UN’s website, but, in practice, all countries in Europe are part of the agreement, and because of Denmark’s adherence to the rules, all carriage to and from Denmark will always be covered.
The law covers carriage executed with a self-propelled vehicle with or without a trailer. The law also applies even if part of the carriage is executed by plane, ship or rail, as long as the goods are not unloaded in connection with this.
First and foremost, this is a law to protect the interests of the purchaser of transport services through safe transport and the timely delivery of the goods. It is not possible to make agreements that derogate from the provisions of the Convention so that the customer is placed in a more unfavourable position than that laid down by law.
The Convention does not apply to carriage performed under the terms of any international postal conventions, funeral consignments and furniture removals, as these types of carriage are regulated by other forms of legislation.
The carrier’s liability for the acts of others
The carrier is not the driver, as you may assume it means. Carrier is a legal term that covers ’the entity that makes an agreement with the sender on the transport of goods’. It thus refers to a company that can issue an invoice. This could be a haulier, freight forwarder, a freight centre or similar, but not the driver, who is employed by the carrier.
The carrier is responsible for any errors made by its employees as well as any errors made by anyone who helps the carrier with the transport, for example another carrier, warehousing facility, or similar. The responsibility for others is just the same as if the carrier had made the errors itself.
Entering into and fulfilling a freight agreement.
The freight agreement is confirmed with the creation of a consignment note (waybill), but the carriage is subject to the CMR Convention even in cases where no consignment note has been created or it has been incorrectly filled out or lost.
The consignment note shall be made in three original copies and signed by both the sender and the carrier.
The first copy is handed over to the sender, the second accompanies the goods and the third is retained by the carrier.
If the goods are loaded onto several vehicles, if it concerns several different types of goods or separate lots, then both the sender and the carrier may demand that a separate consignment note is made for each vehicle, each type of goods or each lot.
Foto: “CMR Convention” by Alinor
The consignment note must include the following information:
The sender is responsible for:
- The creation of date and place;
- the sender’s name and address;
- the date and place for handover of the goods and destination;
- the name and address of the recipient;
- the common name for this type of goods and packaging method, or the official designation for hazardous goods;
- the number of packages, their normal labelling and their numbers;
- the gross weight of the goods or other expression of their weight;
- the necessary instructions in regard to customs clearance and other formalities.
When required, the consignment note shall also include information on:
- ban on reloading onto another wagon;
- any costs, which the sender assumes responsibility for paying;
- any cash on delivery amounts;
- the value of the goods and the amount representing special interest in delivery, see Sections 30 and 33 of the CMR Convention;
- the sender’s instructions to the carrier in regard to insurance of the goods;
- a deadline within which either the carriage or the agreement must be realised;
- a list of the documents that have been made available to the carrier.
The carrier is responsible for:
• the name and address of the carrier;
• any costs in connection with the carriage, such as freight, additional costs, customs duties and other costs, which may have accrued in the period from entering the agreement until the delivery;
• a declaration that the carriage, even if otherwise agreed, is subject to the rules in the CMR Convention.
The sender is responsible for any costs and damage incurred by the carrier as a result of incorrect or incomplete information, which they are responsible for. If a driver, on behalf of the carrier, has entered the information in the consignment note, then they are considered to have acted on behalf of the sender unless it can be proven otherwise
Carrier’s obligation to examine
When a carrier hands over goods for carriage, they are obliged to inspect the goods to ensure they match the information on the consignment note. This includes checking that the number of packages, as well as their numbers and labels, is correct, along with examining the visible condition of the goods.
What is meant by visible condition?
This means what is immediately apparent with one’s own eyes. Are the goods, or their packaging, damaged? The term ’visible condition’ should be interpreted in a wider sense however to include how something smells or sounds. Does it smell bad? Is liquid leaking from the goods? Do the goods sound damaged when moved? Then reservations must be made about this. It does not require any special equipment or knowledge of the goods on the part of the driver.
In relation to the packaging of the goods, the driver shall examine their visible condition. Rips, dents or holes in the packaging may indicate that the goods are damaged and that reservations should thus be made in the consignment note. On the other hand, the driver should not assess the packaging’s suitability for the method of carriage. Only in those cases where the goods have been packaged in a grossly negligent manner or not packed at all shall such reservations be made.
If the examinations above cannot be performed, then the driver, on behalf of the carrier, shall make a reasoned reservation. Be especially aware that reservations on the consignment note are not binding for the sender, unless they have expressly approved them in the consignment note. It is thus not possible to make reservations on the consignment note after the sender has signed it and received their copy of the note.
Validity of the consignment note
If upon inspection of the goods it is apparent that it is necessary to make reservations, then this must be specifically written, together with the reason, in the consignment note. A standard reservation is not sufficient and thus does not fulfil the requirements. The reservations must be precise, so there is no doubt what reservations are being made for. It happens all too often that the only thing listed is that the goods or their packaging are damaged, without stating anything about how or in what way. Are there, for example, scratches, dents or suchlike? How many packages were actually loaded in relation to the information on the consignment note?
If reasons for the reservations are not provided in the consignment note, then it must be considered that the goods and their packaging were in good condition when the carrier received them, and that the number of packages and their labels and numbers were listed on the note. The carrier can however escape liability by proving in other ways that the liability does not rest with them, i.e. reversed burden of proof. If the carrier wishes to take advantage of this opportunity, then this could be other documentation in the form of photos, witness testimonies or similar.
If the sender wishes to transport hazardous goods, then they must provide the carrier with precise details of what the hazard entails and what necessary specified rules must be followed.
If hazardous goods are loaded without the carrier’s knowledge, it may, at any time and any point, unload, destroy or render such goods harmless without any obligation to provide compensation.
The sender is responsible for any costs and damage as a result of goods being surrendered for carriage.
Right of disposal
The sender normally has the right to dispose of the goods. They can stop the carriage, change the destination or have the goods delivered to a different recipient. If the goods are lost, then the sender has the right to any insurance.
The right of disposal and the right to any insurance are transferred to the receiver when they are given the consignment note. This also applies even if the goods have not been unloaded or the goods are still being unloaded.
The sender may however exercise their right of disposal as soon as the consignment note has been created, if the sender writes this on the consignment note. In this case the sender cannot change the transport process.
The carrier’s liability
Conditions for liability and the burden of proof.
The carrier is responsible for any loss or damage to the goods that occurs from the point they are handed over to it until the delivery has taken place. The carrier is also responsible for any costs in connection with delayed delivery.
The carrier is not liable however if the loss, damage or delay is due to error or negligence on the sender’s part. This means that if the information that the sender has written on the consignment note is incorrect or if the goods are not packaged in a way that can handle being transported, then the carrier is not liable to pay compensation.
Nor is the carrier liable if the damage occurs due to the nature of the goods themselves. For example, goods that are particularly prone to collapse or damage, namely rust, rotting, leakage, normal shrinkage or vermin/rodent attacks.
The carrier is also free from liability if it can prove that the damage or delay occurred under circumstances that were unavoidable for the carrier, and that they could not avert the consequences of (force majeure). This could for example be a delay that arose of a result of a trade union blockage, a major traffic incident or similar issue. However, the carrier is still responsible for referring to any deficiencies in the vehicle used for the carriage, even if the vehicle has been hired.
The carrier is also responsible if the goods are not delivered at the agreed time. If damage is incurred as a result of the delay, the carrier must however pay a maximum compensation corresponding to the amount it was paid for the carriage.
It is considered a delayed delivery when the goods have not been delivered by the agreed time and date or if a delivery date has not been agreed upon, a time that would be considered reasonable for the transport sector.
If the delay is more than 30 days in relation to the agreed delivery date or 60 days, if a delivery date has not been an agreed upon, then the goods are considered as lost and the carrier shall pay compensation just as if the goods had been lost.
Size of the compensation
In the case of the loss or damage of the goods, the carrier must pay the value of the goods so that it can pay for the depreciation.
The compensation cannot normally exceed SDR 8.33 unless agreed with the sender on a higher amount or if the carrier has acted with gross negligence. Some examples of gross negligence include:
In cases of gross negligence, the carrier cannot limit its compensation to SDR 8.33.
What is SDR?
SDR stands for ‘Special Drawing Rights’ and is a ‘fictional’ currency in the sense that it does not actually physically exist as either notes or coins and cannot be used as a means of payment.
SDR has been issued since 1970 by the International Monetary Fund (IMF) with the aim of enabling member states to be able to take out a loan to add reserve currency in connection with international trade.
Currently, however, the borrowing opportunities for the member states are so good that most of them have no need to draw from the IMF. Today it can be seen more as a unit of account in international trade, and thus also an instrument for determining the size of the liability in the CMR Convention.
Why not simply fix the value in US dollars or euros?
The exchange rate for SDR does not fluctuate to the same extent as a country’s rate might, as the exchange rate for SDR is calculated as the total value of four major currencies. If one of the currencies fluctuates slightly, then it will impact the total rate to only a very small degree.
The value of SDR is fixed as the total value of the exchange rate of:
The SDR value is calculated daily with the exception of Sundays and bank holidays, and is listed on exchange rates for the business sector, for example on www.nationalbanken.dk
Delivery of the goods
If the goods cannot be unloaded at the recipient’s address or if they refuse to receive the goods, then the carrier must gather information from the sender. The carrier can normally have covered any costs incurred by the sender in connection with goods that could not be unloaded.
If the receiver received the goods without examining them and without objecting to the carrier or the driver in regard to lost or damaged goods, then it is considered that they received the goods in the condition that was stated on the consignment note. Regardless of whether the receiver examined the goods or not, they can subsequently complain about non-visible damage
Carriage that is performed by several carriers consecutively
If carriage is performed by several carriers consecutively with one single consignment note, then they are held jointly and severally liable for the entire carriage. The entitled party may therefore demand compensation from one of the carriers or from all of them.
If one carrier has paid out compensation then it may demand that the other carriers pay their share of the compensation. The compensation is paid first and foremost by the carrier that has inflicted the damage. If it is impossible to ascertain who caused the damage, then the responsibility is shared between them in relation to how great a share of the total freight each of them was given.